Disruptive technology and government regulation

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Disruptive technology is not for the faint-hearted. By definition it is intended to replace the way we currently interact with or use a specific technology and create a whole new industry. Not surprisingly even big companies are reluctant to invest in disruptive innovations given the potential impact on corporate profitability, preferring to channel their resources on sustaining existing product offerings which is considered less risky. This void has given young, ambitious startups the opportunity to take the bull by the horns and venture into the unknown. Needless to say many Israeli startups are at the forefront of the disruptive technology revolution.

But disruptive innovation can also have serious legal and societal ramifications. In their quest for the next big thing and to take the world by storm, companies often touch upon aspects directly impacting one thing – people. Take for instance the heavily commoditized surveillance systems industry. Businesses and governments are no longer interested in acquiring systems which simply observe and transmit video images to a command center manned by security personnel. Buyers want intuitive recommendations and real-time analytics as to whom they should be targeting in the crowd. This search for greater added value has led to the development of advanced facial imaging software providing the ability to map an individual’s facial features and verify the identity from a digital image. The benefits range from identifying missing people to spotting criminal elements as well as preempt terrorists. Yet facial recognition technology has its limitations and also the potential for serious abuse if not regulated properly. Whether used for reasons of public safety, national security or for commercial purposes it raises ethical questions concerning the privacy of people.

There are similar worries in the highly competitive retail space where online giants are disrupting the entire industry by penetrating into the offline space as well. Deploying a combination of smart cameras & sensors in physical stores that enable customers to buy goods by just picking the item of the shelf, and paying with their mobile phone app on the way out (without having to stand in line at the counter) is certainly set to heavily disrupt the retail sector. Furthermore the ability of retail giants to accurately measure facial expressions, body language and track what the consumer is looking at while in the store provides them with intimate knowledge and control over their buying habits. There are obvious reasons for privacy concerns but it’s not all bad though. The upside being that understanding patterns of consumer behavior while shopping provides retailers with deep insight into the customer buying experience, improves efficiency and increases loyalty. Needless to say retailers gathering such sensitive consumer data have great responsibility towards guarding this information and keeping it safe from business predators.

Another disruptive driver is the Autonomous car revolution. Autonomous, driverless vehicles use a combination of sensors, computer vision, machine learning and Artificial Intelligence (AI) algorithms that are able to provide split-second situational awareness while driving. Research has indicated that self-driving cars have the ability to significantly reduce accidents and fatalities on the road, in addition to easing traffic flow time and contributing to economic productivity. Autonomous cars have their technical risks & flaws as witnessed by recent incidents even involving the loss of life. The technology has obviously yet to be perfected but the direction is clear. Indeed, collaboration between leading vehicle manufacturers and startups is only increasing as is venture capital funding for the purpose.

At the onset every technology has performance issues, and this is even more so for disruptive innovations. Most reports indicate that the next few years will probably see a number of disruptive technologies reaching maturity. Evidently there will be risks but with proper safeguards in place especially to protect personal data, defend privacy, enhance safety and prevent misuse, we only stand to gain from these drivers of change. The key to success is impartial regulation, managing conflict of interest at the private/public levels and setting up of the appropriate ecosystem (especially in the case of autonomous cars) well in advance to facilitate a smooth roll-out of these innovations. For that to happen, the relevant government departments will have to start taking an active role and get involved in the process. The ball is in the court of the regulators and remains to be seen if they are able to rise to the occasion.

About the Author

Josh Daniel is an international sales & marketing executive. He has held senior positions in hi-tech companies in Israel and has a passion for writing on technology & international affairs.